Picanto Company distributes a lightweight lawn chair that sells for $15 per unit variable costs are $6 per unit, and fixed costs total $180,000 annually.

Instructions

.Use the CM ratio to determine the breakeven point in sales dollars.

.The company estimatesthat sales will increase by $45,000 during the coming year due to increased demand.By how much should net operating income increase?

Select one:

a.$400,000 and$26000

b.$300,000 and$27000

c.$500,000 and$29000